I wonder how often a homeowner looking to sell their home and move on to the next step in their life has thought, “I wish I could sell my house without an appraisal or the approval of a bank.” Since appraisals can come in too low and banks can drag out mortgage approvals with endless document requests which can slow down or even stop the sale from happening, I’m guessing this question has been asked by many sellers.

When selling your house in the traditional way there’s no way to avoid an appraisal because that’s a key part of the process for the bank to grant a mortgage. And there’s no way for the traditional buyer to get around the hoops that a bank can make them jump through before they can close the sale and buy your house.

With the traditional way of selling your house, you vet and hire a real estate agent who you like and trust. The real estate agent will list, market, help stage, and show your house to prospective buyers. They will then receive and negotiate offers on your behalf and be there through every step of the sale through to the close.

In the meantime, you, as the seller, have to hope that buyer’s inspections don’t turn up any problems that you will need to address by either fixing the problem or lowering the selling price by what the fix will cost so the buyer will move ahead with the purchase.

At the same time you also have to hope that your house appraises for the right amount and your buyer has no trouble securing the mortgage they were “pre-approved” for, so the transaction can be consummated.

Over the last couple of years as housing values skyrocketed, getting a good appraisal wasn’t really a problem. But, here in the fall of 2022 with rising mortgage rates, they could force sellers to lower their prices. Home values have begun to fall and getting a good appraisal may not be as easy as it has been.

This takes us back to our initial question, and the answer is yes, you can sell your house without an appraisal or needing a banks approval. Here at Black Girls Buy Houses we buy houses in as-is condition for cash. As investors we bring our own cash to the table and don’t rely on a bank or mortgage to close the sale.

Maybe you’re thinking that you would walk away from the table with less money if you worked with us. Before we address that concern, let’s take a closer look at some appraisal problems and bank issues that can affect mortgage approval.

Appraisal Problems That Can Affect Mortgage Approval

A home appraisal is an unbiased professional opinion of a home’s fair market value and is required whenever a mortgage is involved in buying, refinancing, or selling property. To determine the value the appraiser looks at the home’s condition, square footage, number of bedrooms and closets, functionality, landscaping, recent upgrades, location, and more.

The appraiser also takes local housing market conditions into account by looking at recent sales of similar homes in the area. These comparable properties combined with the condition of your house help the appraiser determine your property’s value.

Sometimes, the appraisal can slow, or even stop, the mortgage approval process. This can be frustrating. Here are some common home appraisal problems that can cause a mortgage to not be approved:

  • The Appraised Value is Lower Than the Sale Price – If the appraiser’s valuation comes in lower than the agreed upon sales price, the loan can’t move forward unless the seller agrees to reduce the price to the appraised value.
  • Deferred Maintenance on Critical Repairs – Your house will be inspected in its current condition. Your property must meet certain minimum standards before a lender will approve the loan. If there is evidence of major deferred maintenance on the property, like a dated roof, the mortgage will either be declined or the bank will insist that repairs are done before issuing a mortgage.
  • Habitability Concerns – Excessive deferred maintenance can jeopardize the home’s habitability which could make the home ineligible for a mortgage loan. As an example, if an appraiser notices structural issues such as cracks in the foundation, the home’s value can fall dramatically. Foundation repairs can be expensive and lenders often won’t approve home loans for properties that need such extensive repairs.
  • Unique Property Without Local Comparisons – The appraisal reflects data that compares the market value of your home with similar properties that have sold in the area. For example, if you’re selling a single-family house in a neighborhood of primarily duplexes then there may be no comparable sales with which the appraiser can determine value.
  • Declining Market in the Neighborhood – The appraiser must assess the real estate market in the neighborhood by selecting one of three choices: increasing, stable or declining. If the property is in a neighborhood that has experienced declining values over the previous 12 months, then the lender can ask for more money down, regardless of what the final value may be. If the borrower doesn’t have the extra money for a larger down payment, then their mortgage could be declined.

So, anything from deferred maintenance on the home to cool market conditions can lower a home appraisal. Recent sales in the neighborhood will help determine the market value of the home. So if sales have been slow, or if sellers have been accepting lower offers, the value of all homes in the area can be affected.

Reasons Why Banks Don’t Approve Mortgages

Aside from appraisal issues there are other reasons that a bank could decline a mortgage for your buyer. Some of the most common reasons are:

  • Credit Score is Too Low – A low credit score might indicate a buyer has difficulty making on-time payments or handling the financial responsibilities of the loan.
  • Debt-To-Income Ratio (DTI) is Too HighThe DTI ratio helps lenders determine whether your buyer can take on more debt. If the DTI is high, they may not be able to afford the
  • The Loan-To-Value Ratio (LTV) is Too HighLTV compares the mortgage balance to the value of the home. Certain loans require specific down payments and LTVs.
  • Employment Status Recently Changed – Lenders like to see financial stability. If the buyer can’t prove their income is steady, lenders will worry if the buyer can afford a mortgage.
  • Unusual Bank Account Activity – Buying a home comes with many costs that need to be paid for on top of the mortgage, such as closing costs, insurance premiums, and taxes. The lender will want to make sure your buyer has enough money in the bank to cover these expenses for up to 6 months. Also, recent large deposits, especially from unknown sources, can raise red flags.
  • Problems With the Property – The results of a home inspection can also make or break your chances of getting a loan. As mentioned earlier, if the appraisal uncovers a major issue, like a bad foundation, the loan may be denied as the home would be seen as a bad investment.
  • History of Missed Mortgage Payments – If your buyer previously owned a house, the bank will want to see evidence that they paid their mortgage consistently and on time, otherwise they may not feel it’s worth the risk to approve this loan. Having a short sale or foreclosure on their record may also prevent your buyer from getting approved.

As you can see, there are many things that could go wrong with appraisals and mortgage approvals that could lead to you preferring to sell your house without an appraisal or bank approval.

How to Sell Your House Without an Appraisal or Bank Approval

There is an alternative that allows you to sell your house while avoiding appraisals and bank approvals. You could sell your house to an investor like us – at Black Girls Buy Houses we buy houses in any condition with cash, do not charge commissions, and close quickly and easily so the homeowner can escape a stressful situation and move on with their lives.

We’re investors who have our own capital resources so you don’t have to worry about a buyer being approved for a mortgage. And because we buy the house in as-is condition, we neither require an appraisal nor do you have to worry about any deferred maintenance issues.

We provide a free consultation to discuss your house and try to make the process as for you as possible. We’ll go over the details of the property such as the location, condition, and any other information regarding the reason why the house is being ready to be sold. We’ll review your property and make you a cash offer within 24 hours.

As our offer includes the as-is condition of the property we don’t require you to make any repairs before selling. Once you decide to accept the offer, we’ll present it to you in writing. Our offers are 100% yours, without any additional fees. Closing can be settled in as little as 7 days. We’ll also allow you to set the date at your convenience and we’ll pay all closing and transfer costs.

Earlier I mentioned that you might be concerned about walking away from the closing table with less cash than if you sold it the traditional way. In reality, when you take into consideration the fees you won’t have to pay (real estate commissions, staging fees, inspection fees, home repairs or updates, closing costs, etc.) there’s a good chance that you’ll walk away with the same amount (and in some cases, more) than if you sold it the traditional way. Plus, you won’t have to continuously clean and prep your house for showings. And, best of all, we close fast so you won’t be waiting months to get paid.

So, if you’re ready to sell your house you owe it to yourself to consider working with us. Contact us anytime to learn more or to get a competitive cash offer.

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